Foreign Contribution (Regulation) Act, 2010

The Foreign Contribution (Regulation) Act, 2010 regulates how specified persons and organisations receive and use money, securities, articles or hospitality from foreign sources. Its central purpose is to permit legitimate foreign support under oversight while preventing its use for activities detrimental to the national interest.

Scope and regulatory objective

The Act covers the acceptance and utilisation of foreign contribution and foreign hospitality by specified individuals, associations and companies. It is administered by the Ministry of Home Affairs, which oversees foreign funding to eligible recipients.

• Foreign contribution broadly includes donations, deliveries or transfers from a foreign source in the form of an article, currency or foreign security.
• The law is regulatory rather than a general prohibition: eligible organisations may receive foreign contribution after satisfying statutory conditions.

How the Act regulates foreign funding

An eligible association generally requires either registration for continuing activities or prior permission for a specified contribution. Registration is ordinarily valid for five years and must be renewed.

• Recipients must use foreign contribution only for the purpose for which it was received.
• The Act requires prescribed bank-account arrangements, maintenance of accounts and submission of returns to enable scrutiny of receipts and expenditure.
• It restricts acceptance by specified categories closely connected with elections, legislatures, government, the judiciary, political parties and news media to protect public institutions from foreign influence.

Compliance and enforcement

The Central Government may inspect accounts, order inquiries and suspend or cancel registration when statutory conditions are violated. The Act also provides for adjudication, penalties and confiscation in appropriate cases.

• Registration may be refused or cancelled where acceptance or use of foreign contribution threatens sovereignty, public interest, electoral integrity or other protected national interests.
• The framework seeks traceability and accountability without treating all foreign-funded voluntary activity as unlawful.

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